Air Canada looks to raise cash as profit falls

TORONTO (Reuters) - Air Canada may raise up to C$800
million ($750 million) selling and leasing back aircraft and
other inventory, it said on Friday after reporting its
second-quarter profit fell 21 percent due to surging fuel
costs.

Air Canada, the country's largest airline, has tallied the
worth of numerous assets and will focus efforts in the coming
months on determining how much cash to extract amid tough times
in the industry, Chief Financial Officer Michael Rousseau said.

The move comes as Air Canada prepares to cut 2,000 jobs and
reduce its capacity by 7 percent in the autumn and winter to
cope with sky-high fuel costs and a drop in air travel,
especially in the United States.

"We are planning to spend a great deal of time looking at
that over the next couple of months," Rousseau told analysts.

He gave no details about the timing or structure of any
transactions.

"But we obviously have done a lot of homework determining
what is available and what the market conditions are, and we
will take opportunity when it presents itself," he said.

At the end of the second quarter, the airline had nearly
C$1.5 billion in cash and short-term investments to draw on,
down from C$1.8 billion a year earlier. Sales and lease-backs
and other transactions could be used to bolster that position
as operating costs rise.

In the quarter, Air Canada earned C$122 million, or C$1.22
a share, down from a year-earlier profit of C$155 million, or
C$1.55 a share.
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